Windows 8 PC Sales Continue to Lag Behind Those of Windows 7

Almost two months into the Windows 8 life cycle and a trend is starting to emerge: Sales of new PCs based on Windows 8 continue to lag behind those of Windows 7 PCs from the same period last year. But NPD claims a new culprit in this shortfall: Low-cost netbooks did “incalculable” damage to the PC industry and destroyed the high-end mobile market that Windows 8 now targets.

A report in “The New York Times” includes a suspicious amount of anecdotal information to make its point about the Windows 8 sales problems. But it at least provides a valuable first-hand quote from Acer president Emmanuel Fromont, who admits that sales of Windows 8 PCs were “off to a slow start” and “lower than expected.” It also cites NPD data that examines the period from the Windows 8 launch to beyond Black Friday.

I had previously and exclusively reported that launch-time and first-month sales of Windows 8 were both about 20 percent lower than Microsoft’s expectations. Microsoft internally blamed PC makers for the shortfall, since they did not show up with the variety or volume of new Windows 8-based PCs and devices that were promised in time for the launch. I also separately reported, again exclusively, that Microsoft would ramp up efforts to sell the Surface with Windows RT tablet via third party retailers ahead of the New Year, which of course began happening less than two weeks ago.

But now we have NPD weighing in on Black Friday and holiday sales.

The New York Times quotes NPD data showing Windows 8 PC sales were down 13 percent over the 6 week period between the Windows 8 launch and the post-Black Friday week. This is compared to the previous year, however, not the same period of time when Windows 7 launched.

NPD says that Windows 8 is launching into a market that is decidedly different than that faced by Windows XP, Vista, or 7, because PCs are no longer at the center of personal computing, and consumers are stretching out PC purchases longer than before. This seems fairly obvious, but the push for low-cost computing devices, which began with the netbook and now continues with tablets, has muted the demand for high-end PCs. And while there are lots of low-cost PCs for sale this season, they lack multi-touch and are hardly compelling; the multi-touch PCs that make Windows 8 shine are far more expensive.

It doesn’t help that tablets based on Windows 8 (and Windows RT, the ARM-based version of Windows 8) start at about $500 and quickly escalate in price. This holiday season, the best-selling tablets—the Samsung Galaxy Tab 2, Google Nexus 7, and Amazon Kindle Fire HD—all start at $200, less than half the cost of a cut-rate Windows 8 tablet. This price point, which Microsoft helped establish with the netbook, is contributing to the lack of consumer interest in Windows 8 devices and PCs. And the average selling price of PCs continues to fall, to below $400, a price point where almost all of the PCs consumers are buying are non-touch-based.

This splitting of the market has interesting ramifications. Microsoft should be credited for moving Windows quickly into the world of multi-touch tablets with Windows 8. But because consumers are now trained to expect low-cost devices, they are purchasing low-cost multi-touch tablets that don’t run Windows and low-cost Windows PCs which don’t offer multi-touch capabilities. And as of the end of 2012, tablet sales, overall, have eclipsed sales of notebook PCs in the US. This is a big change from a year ago.

None of this means that Windows 8 is a disaster, as some claim. Instead, it’s fair to say that Windows 8 is entering a much more volatile market than did its predecessors and that a lack of high-quality, low-cost options—indeed, largely PC makers’ fault—has contributed to consumers holding off on new PC purchases while they snap up lower-cost devices, most of which are used as secondary, or companion devices. Microsoft is obviously playing a long game with Windows 8, and it has created a foundation that can compete in this new world. But there isn’t a single Windows 8 PC or device that’s priced to do so right now. And Windows 8 will suffer by comparison this quarter as a result.

Discuss this Article 24

@waethorn,
Let's see. Apple has sold 300M iPhones, 100M iPads, 125M Macs, 350M iPods. Yah, I think their stuff sells okay.
iPads+Macs make Apple the largest computer vendor in the world. Regardless of whether you like that argument, their products sell, and sell and sell, something I expect Microsoft would love to say about their hardware products, which have never achieved much success*.
There's a lot more to making people buy your stuff than the lowest possible price. There's also more to being a successful company than the largest unit sales. Despite the incredible number of Apple devices sold, sheer numbers is not their goal.
*Xbox is the exception. Of course, Xbox, despite its success, is still not even a break even product for Microsoft.

This article reads like some sort of psychological denial.
PC sales are down, partly because of the economy and cycles, but largely because people do not want Windows 8. Theyd rather stick with Windows XP / 7 and hang in there until a service pack fixes Windows 8 (or a Windows 9 comes out which fixes the many problems and issues of Windows 8).
PCs now more than ever are the center of computing, Paul, do not kid yourself. Most everyone has and needs a PC to work surf and play. These other gadgets are the plus, not the centre of computing.
If the folks at Microsoft want PC sales to increase, they should focus on serving their customers, making the operating system and applications better than ever, and give up the foisting of hair brained marketing schemes on them. These schemes are easily seen for what they are, and the public rejects them.

I just don't think that blaming other company's because they aren't flooding the market with cheap as can be plastic Win8 computers is the way to justify low sales of Win8 devices, whether it's computers or tablets.
Are 'they' saying that no one who runs Win8 wants a nice high end machine?
That's what it sounds like. It sounds like all the reports, and Paul, are saying Win8 users are cheap and they won't use any device over $500.
So, why not? Why the backlash that only more expensive devices are available?

....aaaaand he're we go with another round of the Apple apologists coming to their defense.
If you include iPad's in PC sales, than you can also include every single Chinese no-name Android tablet in that market, and there are literally hundreds of these. You might as well include every iOS device too, since the OS is the same. Fact is, when you equally include Android devices, Linux eats everybodies lunch.
But that wouldn't be fair though would it?...
An iPad is not a PC. Its market may exist in the same price point as the PC mass market, but more PC's sold in the sub-$600 market than iPad's, and the Mac is still a joke, ESPECIALLY outside of the US.
If you want to take a look at the biggest selling mobile device, it's still the common Windows-based commodity laptop, sorry to say.

Paul: I agree with you and have argued that Microsoft blew this Christmas season by not ensuring that they had the right products available at the right price points. Unless Microsoft moves very quickly (not a obvious strong suit), it risks being #3 in arguably the most important segment in the industry. And if history is any indication, the number 3 player in the market is left with the profit scraps from the other 2 dominant players. Time will tell if Microsoft is really playing the long-term, as you surmise. However, if the Surface (both RT and Pro) were more urgently priced to attract the lower end of this market ($100 less), perhaps the results of the W* launch would be different. We'll know in about a year, but this looks like the Windows Phone scenario being replayed...

I don't know how valid the data is but according to Net Applications, Windows 8 uptake has now fallen behind Vista.
http://www.computerworld.com/s/article/9235059/Windows_8_s_uptake_falls_behind_Vista_s_pace

Firstly, I am using Windows 8 Pro on my desktop, and would very much like to own a Windows 8 Pro Tablet PC. For a laptop or a desktop I prefer Windows 7, but Windows 8 does work.
To me, the main issue for sluggish Windows 8 Sales is the lack of supply. I have yet to see a Microsoft Surface device, none of my local shops have any of the Microsoft Surface RT devices, and many have no Windows 8 Tablet Devices at all. The Surface Pro is yet to be released.
There are many varying needs that we all have for a Tablet device, and once you allow a Tablet device to actually be a PC as well, the complexity of the needs/wants of people expands dramatically.
What is it that you want Windows 8 for? Is it for a PC that is in a Tablet form, or is it that you want a overly large smart phone?
There are plenty of over large smart phones on the market, some are even quite cheap.
But if you want a Windows PC, like myself, that is a different matter, I have yet to see a device that supports my actual requirements. Atom Processors are too slow, weight needs to be less than 1 kg, it needs 4G mobile broadband, graphics that can play games (i.e. Haswell chip set), to be able to run Microsoft Office, to do [basic] video editing. Basically a replacement for my desktop PC. And therefore good docking stations.
What is a PC used for? Typing up stuff (emails, assignments, reports, etc), and for most of us, typing requires a decent keyboard. What many of us want is a Tablet that has a portable keyboard, but can also be used as a Tablet. I quite like the designs where the Table docks into a keyboard when you want a keyboard )looking like an Ultrabook), but it can undock and be a lightweight Tablet device when you need a Tablet. It is nice when the keyboard can be the screens cover too.
So what do you want in a Tablet PC?, and can you go to a store and purchase it today? I cannot. Sales will increase when people can.

Really?! I've been saying this ever since Intel announced the Ultrabook. Intel doesn't get it - they announce the netbook standard with the Atom, but customers were hugely disappointed by the performance, and AMD ate their lunch by introducing faster chips in $399 Walmart specials more than 2 years ago (they've come down since then). Intel saw no profitability in the Atom, so they thought they could sell more-expensive chips by re-introducing the $1000 pricing model?? They just don't understand consumers. Most of Intel's current sales are of Pentium dual-core chips, and moreso because many consumers recognize Intel's name more than AMD, which is unfortunate because AMD has far superior graphics technology in their chips.

MS should be credited for moving Windows into the world of multi touch tablets with Windows 8?
Seriously?!?!
Please explain the logic of that. If you give them that kind of credit then what kind of credit do you give Apple, Google, Amazon, and others for moving into the multitouch tablet world much quicker? Do they deserve "incredible" credit? "Super-duper" credit?
Trying to give MS credit for moving Windows into such a market just sounds ludicrous. They were slow and late to the changes that happened. Just about anyone who isn't a MS diehard can see this. They were late just like they were with phones when the market demand changed with the iPhone. They were in the tablet market before any of them unless you try to argue Apple with the Newton. MS was lazy. They had multitouch in Windows 7 but it was nothing but a bolted on feature without any thought put into the UI.
Windows 7 came out in 2009...the iPad came out in 2010. How can you possibly give credit to MS like you did?
As far as the splitting of the market it was destined to happen but it seems that MS couldn't see it or was in denial. For years Apple has been taking sales from the high end market while MS with its partners embraced the race to the bottom to increase volume. Now that MS has competition in that segment they don't have a good handhold and it's not about tablet competition now as much as it is for the dollar. MS is getting beat up in not coming to market with a product that convinces enough people that they have to throw that kind of money at it. The surface keyboard is nothing more than a gimmick to consumers and the interface of Windows 8/RT isn't intuitive when someone looks at one in BestBuy.
At any rate I don't feel that in the grand scheme of things MS failed even though in their world they did. Just like they out executed everyone back in the 80's and 90's so have they been out executed in the 21st century. Balance is being restored thanks to competition.

"So, if you don't want the iPad to be a "computer", then what the heck is Surface?"
Since it runs apps that also run on x86 version of the OS, it's more of a computer than an iPad.
An iPad won't run OS X applications though, and Chrome won't run Android apps. If we look at Windows RT as being the basis for Windows 8, Windows 8 is just "Windows RT +".

"f you include iPad's in PC sales, than you can also include every single Chinese no-name Android tablet in that market, and there are literally hundreds of these. You might as well include every iOS device too, since the OS is the same. Fact is, when you equally include Android devices, Linux eats everybodies lunch"
Sure, that's fine. However, the hundreds of no-name Android tablets still amount to little of the market. Yes, Linux eats everyones lunch if you count phones, otherwise that's not true.
Aside from the debating points that have been rehashed here many times, we have to figure out some rational basis to discuss a marketplace that is no longer (or soon) centered around boat anchor desktop PCs, or even laptops. The wave of smartphones and tablets is no overlapping the functionality of PCs to such an extent that the categories are blurred. So, if you don't want the iPad to be a "computer", then what the heck is Surface? Aside from partisan bickering, what are the rational distinctions that draw the lines?
My response was because your comment about the marketshare of OS X was completely off the mark since the fastest growing segments for new devices don't use OS X or Windows. A bigger view is needed, and that's just where the world is headed.

I have to agree that the market is different. I have multiple Win 7 machines and several of these were upgraded from Vista. These things still run fine and I have no intention of replacing them anytime soon. I do replace my wife's laptop every couple of years because she beats the hell out of it but the current batch of win 8 laptops with touch are more expensive than I want to pay. I also have multiple kindles including Fire and 8.9 Fire HD and my wife and kids all have iphones. We spend more time consuming content on them that we used to do on a laptop or pc. I thought about getting a surface or a ultrabook w/ win8 but couldn't justify the price, especially since I have a laptop through work. So, I think Win8 is great and really want a convertible win 8 machine or even a surface but I can't justify the pricetag. If the surface w/ keyboard was $450 I would have bought it instead of the $299 fire hd but I can't justify $600 for it. Am I cheap - yes, especially in this market. BTW, my kids all have iphones that they love. Interestingly they have no desire for an ipad but they think the surface is really cool. If it was cheaper I would have bought all of them surfaces for xmas. Maybe next year.